Long term care insurance is an important financial tool to protect ones assets while also paying for long term health care needs. But, is it for everyone? Most people expect Medicaid will cover their long term care costs, so they over look the need for insurance. Medicaid is for people with little or no assets. To qualify for Medicaid’s long term care benefits, one must have spent down their assets and reached poverty level to qualify. Then you have no choice in your health care decisions and are relying on bureaucrats in government to make decisions for you. However if one is at the poverty level this is better then not receiving any care at all. However if you have assets and want to remain in control of your health care then look into long term care insurance.
An argument against LTC insurance might be that it is very expensive. First lets compare LTC insurance to an investment. Lets say the premium for a couple is $6471 a year. That couple is immediately covered up to $324,000. If a health care need arose they would be covered. Without LTC insurance that same couple would either have to use their life savings. At 3% compounded interest it would take this couple 23 years to reach that same amount. Now in 23 years that same LTC insurance policy now covers them up to $570,00 which is now almost double what they have saved. So lets look at the question “Is LTC Insurance Expensive”. It can be more expensive without it.
Lets look at Medicaid again. You must be at or near the poverty level and you are not in control. One recommendation is to purchase enough long term care insurance to cover your assets for a period of 5 years. Start gifting your assets to your children, and then if after 5 years if your still need care you can then start to use Medicaid. Each individuals needs are different and that’s why its best to discuss your options with an experienced and honest long term care insurance broker. Compare long term care insurance quotes and review all your options.